Business Irish

Sunday 25 August 2019

Strike threat at Aer Lingus as key jobs relocated to the US

Airline's complaints staff must compete for jobs as department leaves Dublin

Mike Rutter of Aer Lingus. Photo: David Conachy
Mike Rutter of Aer Lingus. Photo: David Conachy

Fearghal O'Connor

Aer Lingus is to move its key complaints department to the US in what staff fear is part of a major outsourcing move.

At a town hall meeting, the IAG-owned former national airline told up to 30 staff impacted by the plans that it is to establish a new Global Guest Relations Service Centre in the US just after Christmas, leaving them to compete for three remaining Irish jobs.

The guest relations department - which handles passenger complaints over baggage, delays and other issues - will move by February 28, chief operating officer Mike Rutter told the workers.

Trade unions were later told by management that the move was "a strategic decision" rather than a proposal and that there would be no consultation.

Siptu officials threatened to ballot for industrial action in response, telling management at a follow-up meeting that the manner in which the Dublin jobs were to be eliminated was "unprecedented" in the airline's history.

"If you come at us with a big stick we will respond with a bigger one," a trade union official told senior management. Staff had been told before the initial town hall meeting that it would be a business update and there was no need to bring trade union representation.

But at that meeting, after a long update on the business, Rutter delivered the shock blow to staff. Rutter - who previously led British airline Flybe's outsourcing push - went on to outline his concerns saying that the guest relations department "is not what good looks like", according to documents from the meeting seen by this newspaper.

Rutter said that staff had failed to engage with the airline's management-change programme, according to the presentation documents.

There had been a failure to engage with basic and universal protocols around attendance, leave and work patterns for which industrial agreements exist, Rutter told the meetings.

Rutter said that the airline was concerned about poor levels of efficiency and case closure rates in the complaints department, according to sources.

These claims have been strongly rejected by staff working in the section and sources said they were shocked by Rutter's comments and blunt manner.

Rutter told the town hall meeting that the Aer Lingus Global Sales & Guest Services team was already located predominantly in the US.

"We now believe that they should be supported by a fit for purpose Global Guest Relations Service Centre.

"Having considered all the elements our decision is to locate this centre in the US," he said.

Staff affected will be invited to apply for the three new positions, apply for other positions in the airline or will transfer to the "redeployment pool", a special category for staff whose jobs at the airline have been eliminated or moved abroad.

In a second meeting, union officials rejected an assertion by airline management that the move did not classify as outsourcing because the positions would remain in-house despite moving to America.

In the previous town hall meeting, before announcing the decision, Rutter had outlined to staff the benefits of change at the airline since it was taken over by IAG in 2015. He had told the staff that Aer Lingus was leveraging synergies with IAG, using the British-based company to carry out many back office functions such as IT, fleet acquisition and cargo. IAG has also taken over the strategic sourcing function from Aer Lingus.

Rutter said that "the stabilisation and subsequent rapid growth of Aer Lingus has been based on becoming a truly global business", according to documents.

America had been the engine of growth of the airline over the past three years and over 60pc of north Atlantic business had come from US points of sale, he said.

"Our business structures have started to reflect that globalisation. A number of guest-facing services have been switched to global leadership."

The bulk of the sales, marketing and guest services functions at Aer Lingus are now run from north America with a north American workforce, said Rutter.

Rutter highlighted the fact that Aer Lingus is now a private sector company operating in a highly-competitive market place.

Sources at the meeting said that Rutter outlined how the journey from state company to private sector company has been painful and hasn't been without industrial and cultural issues.

Rutter told staff how IAG had launched Level, a new long-haul low-cost airline and "internal competitor" to Aer Lingus. It had "a fully-outsourced business model" and an "aggressive growth plan targeting the Atlantic".

"IAG, as a rational parent company, would deploy Group capital resources to the operating company that can generate the highest return on invested capital," he said, warning Aer Lingus must focus on remaining competitive.

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